Transform digitally or be disrupted

Over the past few years digital transformation has become somewhat of a buzzword and many business and IT leaders are adding the term of digital transformation leader to their resumes.

As with many overhyped topics this can lead to ignorance by information overload.

Instead of paving the way for innovative digital approaches to old business problems most companies are relying on tried and true approaches and driving towards a "me too" portfolio of services and technology capabilities.

Herein lies the danger.

As per a 2018 MIT Sloan Review Article there is a disconnect with leaders anticipating digital disruption vs. organizations actually preparing with the right amount of due diligence:

As per the Global Center for Digital Business Transformation today’s top 10 incumbents (in terms of market share) in each industry will be displaced by digital disruption in the next five years.

As per the groups research nearly a third of companies are taking a “wait and see” approach. Only 25 percent describe their response to digital disruption as proactive.

So how can we be proactive and avoid being digitally disrupted?

Here are common measures to put digital transformation into overdrive rather than being disrupted by more nimble start up, entry level competitors in your industry and finally for your industry to stay relevant and focused on changing consumer and customer behavior:

1.  Hire a Chief Digital Officer (CDO) - Many companies make the mistake of driving digital transformation from within promoting existing players to be digital leaders. That approach hampers the true transformation potential where newly hired leaders, chief architects and futurists can be more aggressive and disruptive, cutting through bureaucracy and challenging traditional approaches. These leaders will test the limits of an organization and truly work across departments with and enterprise digital architecture mindset to disrupt across business unit boundaries. The most digitally adept organizations also add chief analytics and chief customer officers to maximize the transformational impact of digital technologies focused on customer experiences and data insights.

2.  Establish a data driven culture where decisions are less focused on gut feel, but based on data insights as laid out in my article: "How to become a data driven organization". Companies that base their decisions on facts and data insights will be able to adapt to change more rapidly and develop products and services that are in line with changed consumers and customers expectations. A digital core culture means being willing to take risks, spend on product innovation and conduct continuous real-time market research.

It may also mean being open to cannibalizing your own business. 

Digital data is the new oil that fuels any organization nowadays:

3.  Establish a digital core commitment - top down from the board level through middle management, employees and college level new hires - this is a shift in mindset that often does not come overnight. This change needs to be supported by modern IT infrastructure and IT solutions for agile data discovery and real-time visibility into all critical processes that affect customers, suppliers, workforce, data management, and devices enabled by Internet of Things, APIs, microservices, containerization and cloud technology

4.  Don't put profit before customer experience and avoid "the Kodak moment" - one of the biggest examples of a company that took that approach is the demise of Kodak which filed for bankruptcy in 2012 because the popular camera brand failed to embrace digital technology with a backlog of patents that could have saved the company. A lesser known fact is that Kodak invented the digital camera in the 1970s, but the decision to focus on its core business of selling films over betting on this new technology that delivers a superior customer experience ultimately was its downfall.

Constantly re-think your corporate vision - Airbnb.com disrupted the hospitality industry disrupting hotel chains and eating away market share.

Other industries like the banking sector will be shaken up by the combination of artificial intelligence, the internet and distributed ledger technology, such as blockchain, which will do away with the need for middlemen (banks) for electronic finance transactions.

5.  Establish a 2 speed architecture as I laid out in this article Bringing Shadow IT out of the Shadows. For many companies it is not feasible to change all IT technologies at once so a 2 speed IT architecture is often mandatory where proven systems of record are continuing to be the foundation for growth, but at the same time enabling agile cloud based technology and plug & play services based on a solid core of systems.

6.  Last but not least - Measure your success:

Digital transformation depends on the ability to measure progress along the way. Examples of digital KPIs:

• Measuring digital channels: monitor the percentage of revenue generated through digital channels such as the web and mobile apps
• Measuring transformation: track KPIs that measure the internal adoption rate and conversion of traditional to digital channels
• Measuring engagement: establish digital engagement metrics that measure how many times a customer touches you, your product and your webpages

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Disclaimer: The opinions expressed in this post are my own personal views and don't represent the views of my past or current employers.

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